Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

Book Review: Alex Kjerulf. Happy Hour is 9 to 5

I must confess I approached this book with a considerable amount of skepticism.

In the world of management theory, many ideas that, at first glance, seem quite attractive, lend themselves to cynical abuse and exploitation by management. I have commented on this blog, more than once, on the dialectical nature of most management fads. They contain a large element of truth, and would be good if actually applied as their rhetoric calls for. But in practice, what they usually translate into is best described by this union-busting consultant's sales pitch: "We will show you how to screw your employees (before they screw you)--how to keep them smiling on low pay...." [David M. Gordon, Fat and Mean]

Tom Peters, for example. All his "revolutionary" rhetoric about breaking down corporate walls and opening the corporation up to the marketplace, abolishing hierarchy, and the like, has amounted in practice to putting new wine in old bottles. Likewise all the other "empowerment" fads, like self-managed teams: strip away all the phony syndicalist-sounding rhetoric, and what you're left with is more aptly described as "management by stress":

From my first reading of Tom Peters' work, my overwhelming impression was of the ambivalent or dialectical character of the "revolutionary" management and organizational trends he championed. Depending on the system of power into which such ideas are incorporated, they could make life either heaven or hell for those doing the actual work.

....[A] lot of it sounds like what might be the seeds of a libertarian, self-managed, decentralized economy, if the structural bulwarks to authoritarianism were removed. The same practices, however, when integrated into the existing system of state capitalism, become what Mike Parker and Jane Slaughter... call "management-by-stress."

The striking thing is that ideas like demand-pull, self-directed teams, and flexible manufacturing are discussed both by corporate management gurus like Peters, and by left-wing economic decentralists, in language that is virtually indistinguishable from one group to the other.... The difference is that Peters considers such ideas (despite his revolutionary rhetoric) largely in terms of their integration into the existing corporate economy, while the left-wingers imagine a post-corporate economy of producer and consumer cooperatives built around the new practices....

Peters himself made it clear that he wasn't opposed to bigness, as such; he just wanted to simulate the advantages of smallness in the context of a large corporation. And he also made it clear that his prescriptions for eliminating middle management, transforming the corporation into a loose network of self-directed teams, and "outsourcing everything" would take place within a mercantilist framework [wherein] corporate headquarters... retained central control of "intellectual property," branding, and finance, as well as the price-setting power that comes from coordinated buying and selling....

For the left-wing economic decentralists, on the other hand, such ideas are expected to reach their full flourishing only when intellectual property, centralized finance, and corporate headquarters themselves have gone the way of T. Rex. In other words, they will become the basis of economic organization in an economy centered on decentralized production for local markets, with production organized predominantly through consumer or producer cooperatives. Peters' prescription, as it is actually being implemented, is a way to integrate the Goths into the framework of the old Roman imperial structure and give the Empire a new lease on life.

All these management trends of flexibility, decentralization, flattening of hierarchies, and related ideas, examplify what might be the seeds of a new libertarian economic system along the lines that Kirkpatrick Sale described in the economic chapters of Human Scale. But adapted to the existing corporate economy, they are more accurately described by Parker and Slaughter in Working Smart.

Many of the stated principles, as such, might be good, if they were applied by workers for themselves, in an economy of worker cooperatives. But when they are done to workers by management, they become management-by-stress.

And at first glance, the rhetoric in Kjerulf's book bears at least a strong superficial resemblance to such manipulative HR gimmicks as Fish! Philosophy, aimed at jollying the sped-up and underpaid workforces of downsized firms into loving Big Brother without any of the inconvenience of, you know, raising pay or decreasing workloads.

But on closer inspection, I believe this book is the real thing. Despite certain reservations, which I discuss at length below, I believe Kjerulf gets it. His book isn't just another attempt to get workers' minds right, a shortcut for inculating lobotomized happiness into people who are treated like shit. He spends a major part of the book, in fact, pointing out that shortcuts don't work, and that there's no way to simulate treating people like human beings.

I'll spend a considerable portion of this review discussing the above-mentioned reservations and the things I still think Kjerulf is shaky on, before moving on to explain why I still think this is the real deal.

RESERVATIONS

Kjerulf does go too far in stressing subjective attitude at the expense of objective conditions. First of all, his rhetoric often sounds dangerously close to the almost identical rhetoric of Fish! Philsophy, which--as any regular reader of this blog should know by now--we hates forever. This, for example, sets off alarm bells:

It’s 10% about the job and 90% about you

The perfect job does not exist. There is no workplace out there that only has the things you like. There will always be a few boring tasks, a few co-workers you don’t like, a few rude customers, a few unpleasant managers.

If your plan is to be happy at work as soon as your work and your workplace are perfect and trouble-free, you will never get there. And if you did you’d probably be bored out of your skull.

Happiness at work is not about eliminating all the bad stuff from your job. It’s about being happy at work even though some of these bad things are present. It’s about building your skills and your energy to fix the problems, and to create more and more positive experiences at work.

This brings up entirely too many associations from Fish!, which is a management attempt to persuade workers that happiness or unhappiness on the job results entirely from a personal choice of "attitude," that has nothing to do with objective, external conditions. While this may be true, it is awfully self-serving coming from the people who make the objective, external conditions so shitty.

For example, the employee newsletter at a particular hospital I'm thinking of--let's call it the Official Happy Newsletter--once ran a fluff article titled "Choose Your Attitude," which gushed (among other things) that if we "choose to provide extraordinary patient care," we could do so, "regardless of your abundance or lack of resources." In other words, the people who cut us off at the knees are assuring us that if we can't run a marathon, it's our own fault. The laws of time, space, and matter don't apply--it's all in your head, man! The amount of work that can be extracted from a single man-hour is infinite, like the number of people who can be fed with five loaves and two fishes. If patients receive a squalid, Third World quality of care, it's not because the administration has turned the hospital into an understaffed shithole in order to feather their own nests--oh no!--it's because workers aren't clapping loudly enough. I wonder how those filth would respond to having their own warm 'n' fuzzy New Age gnostic bullshit reversed on them: "if you choose to provide extraordinary levels of staffing and pay scales, you can do so, regardless of your abundance or lack of financial resources."

But as we shall see later, there is strong evidence that Kjerulf does not identify with employers in such practices. For example, that remark in the last paragraph quoted, about fixing the problems, suggests a fundamental difference from Fish! Philosophy, despite the superficial similarity of rhetoric: while Fish! is about powerlessness, Kjerulf's idea of happiness is closely intertwined with empowerment. Kjerulf, unlike most consultants, isn't there to tell management how to put one over on us. Perhaps that's because he's one of us. Coming, as he does, from a background as a geek, he's dealt with his own share of pointy-haired bosses.

Still, he sometimes seems rather oblivious to just how strong the objective constraints on workers are. For example, he repeatedly argues that we can't afford not to quit shitty jobs. But he might profit from reading a little Barbara Ehrenreich. Ehrenreich, in Nickel and Dimed, painted a pretty vivid picture of just how shitty jobs can be for the working poor (and I could write a few books on the subject myself); but she also made it quite clear, in Bait and Switch, how desperate the desire for a shitty job can become for the long-term, structurally unemployed. Unfortunately, for many people the alternative to a shitty, soul-eating job is the even more shitty and soul-eating prospect of living on Ramen, having the power cut off, or being homeless altogether. Kjerulf's blithe assurances that better prospects are waiting around the corner remind me a bit of all those motivational gurus in Roger and Me who gushed about the wonderful opportunities that had been opened up for those unemployed Flint auto workers.

Another example of the same thing is his response to people who say "I simply don't have time to help others, I have too much work myself already."

However, when everybody subscribes to this philosophy, everybody becomes less efficient, and people have even less time. If, on the other hand, you can take half an hour to help a co-worker, saving him an hour of work, and that co- worker can return the favor some day, then everybody wins. In effect, we don’t have time not to do it. (pp. 80-81)

That may be true. But it's a lot like the mechanic telling you that $100 now will save you $1000 in a few months, or knowing that scraping up the cash to get that tooth pulled now will save a lot more money further down the road. What Kjerulf doesn't seem to understand is that, when the material constraints are bad enough, such "stitch in time" equations are entirely academic. You may or may not have the $1000 in a few months, but you know you sure as hell don't have the $100 now. That's why, as someone so aptly put it, being poor means hoping your toothache goes away. That's why the working poor spend their entire lives renting furniture by the week or rolling over payday advances, paying ten times as much for stuff because they didn't have the money up front to get it cheap.

Consider another hospital example (we'll just pretend these are all hypothetical): The different departments--nursing, dietary, respiratory therapy, physical therapy--are so understaffed that they're all at each other's throats. Each sees the other as a source of more work it's not staffed to handle, and requests for help from the others are just another weight tied to a drowning man's ankle. Each tries to save itself by pushing off as much work on others as it can. And sure enough, the official happy talk from management gushes that "we're all part of the same team," and about "internal customers" and "treating others as you would want to be treated." But that's just self-serving horse shit. Telling understaffed departments, all at their breaking point, not to be at war with each other is kind of like throwing a bone into a yard full of hungry dogs and saying "y'all play nice, now, you hear?"

Second, in his emphasis on subjective attitude, Kjerulf largely ignores the extent to which objective work conditions have changed as the result of structural forces at the level of the political and economic system as a whole.

Kjerulf's approach is too individualistic, in that it takes large-scale structural conditions, like the overall labor market or the structure of corporate ownership, as a given. There doesn't just happen to be a corporate economy that "just growed," and some workplaces that are good and some that aren't because some managers just happen to "get it" and some don't. He ignores the extent to which structural conditions are a radical change from those of other periods, and reflect a deliberate choice of constraints imposed from the top. The range of structural conditions that currently exists reflects thirty years of deliberate policy choices by those at the top of the corporate state, not only *not* to "put employees first," but treat them like shit, to squeeze them for every drop of sweat possible, and to systematically deprive them of as many options as possible so they have to come back for more and like it (remember that quote from the union-busting consultant in the Intro?). Thirty years ago the neoliberal Pharaohs decreed, "let them gather their own straw, but let not the tale of bricks be minished aught." And in the years since that decree, an entire industry of labor consultants has come up with gimmicks like Fish! (enthusiatically embraced by Pharaoh's overseers in Human Resources) aimed at convincing workers that "we [sic] can choose to do an extraordinary job making bricks, regardless of our abundance or lack of straw."

In minimizing the importance of objective conditions, Kjerulf considers mainly the intrinsic character of the work itself. That is, he focuses mainly on the character of work as it varies from one job to another, as workers sort themselves into types of work that they consider more intrinsically enjoyable and avoid those that they consider unpleasant.

Some people think that it’s only possible to be happy in certain kinds of jobs—those fun, creative ones. This is simply not true. You see many unhappy people in supposedly fun professions, and many happy people with supposedly unpleasant jobs, like sewage workers or funeral directors.

Even if you’re not crazy about the actual work you do, you can still be happy in your job, provided that job makes you happy in other ways...

In so doing, he neglects changes in work conditions besides the intrinsic character of the work itself. Conditions vary not only from job to job, but over time within a particular job. The general tendency under the neoliberal revolution of the past thirty years has been one of downsizing, stagnant pay, speedups, and ever-increasing stress. Some may find the work of picking up garbage or emptying bedpans to be intrinsically satisfying, as a matter of personal taste. But people doing such work are having to pick up a lot more garbage cans, and empty a lot more bedpans, for not much more pay, than they were doing thirty years ago.

I can speak to the bedpan emptying example from personal experience at another one of those hypothetical hospitals. I can remember when, maybe a decade ago, it was typical for an orderly to have five or six patients on a regular medical floor. There was usually plenty of time to get all the baths done, and all the other regular chores; there was enough downtime between call lights, after the chores were done, that people might frequently get five or ten minutes off their feet. Now it is common to have nine or ten patients apiece, with call lights sometimes stacked up eight or ten deep on the intercom, and everyone about to go postal trying to remember what they were doing twenty interruptions ago. The respiratory techs at a particular hospital I'm thinking of have been repeatedly downsized, to the point where they are working 60-hour weeks and all vacations are cancelled, and it often takes a long time to respond even to urgent calls. A couple of years ago there, before the last round of downsizings, the respiratory techs were already complaining of hellish conditions of understaffing and overwork in the wake of the previous few rounds of downsizings. The physical therapists, likewise, have gradually moved from five 8-hour days to five 10- or 12-hour days, as their staffing has gone down by attrition.

Perhaps the biggest structural change of all is reflected in the very concept of the job. In the Old World, the factory system arose in the immediate aftermath of a long series of land expropriations--the Enclosures probably most famous among them--by which the laboring classes were robbed of independent access to the means of subsistence, and left with no choice but wage labor. In America, the majority remained self-employed well into the late nineteenth century. The very idea of the job as something one is given by an employer, rather than of work as something one does, dates back to the decline (or suppression, rather) of self-employment. To the extent that the job is something imposed on the more natural human condition of self-employment and cooperative labor, the distinction between "my time" and "company time," and the conception of "ownlife" as something that exists only outside the factory gates, are built into wage labor by its very nature. There are very real limits to how far human beings can be reconditioned to view anything they do under orders from someone else as a source of self-actualization.

One of the most exasperating things about Kjerulf's book is the historical vacuum within which he views such issues. For example, consider this passage he quotes from Richard Reeves' Happy Mondays:

Anybody who thinks work should be miserable simply because it is work or that there should be a cordon sanitaire between “work” and “life” needs to find a time machine, key in the year 1543, and go and join Calvin’s crew. They’ll feel more at home there. In the meantime, the rest of us will get on with enjoying our work, and our workplaces. (p. 128)

I hate to say it, considering the respect I have for Kjerulf and his overall work--but this is unadulterated horse shit. The whole point is that they're not "our" work and "our" workplaces. There's a good reason for the separation of work from life: damage control. Work, which used to be a part of life when the average person was self-employed, suffered a hostile takeover by the owning classes and the bosses. The only way to heal the split between work and life is to subject the workplace to another hostile takeover from the opposite direction, and let the bosses find out how it feels to have their fucking cheese moved for a change.

Kjerulf argues for an end to the work-life dichotomy, perversely, on the grounds that work is our main source of identity:

Just 50 years ago people had many sources of identity. Religion, class, nationality, political affiliation, family roots, and geographical and cultural origins all went into defining who we are. Today most of these, if not all, have been subsumed by work. When you meet someone at a party, what’s the first question you typically ask them? Exactly: “So, what do you do?”

We are increasingly defined by our work. It’s what takes up most of our time. It’s where we get to use most of our skills and talents. It’s where we experience our greatest triumphs and failures. It’s also the basis for our standard of living. All of this means that when work is not working for us, we become very vulnerable. This is why happiness at work is crucial! (p. 129)

It boggles my mind that Kjerulf simply accepts this enormous and radical change over the past fifty years as just another matter of fact, without stopping to ask why? Why has the workplace hollowed out the rest of life in recent decades? Why has an increasing portion of time been taken up by work, at the expense of the rest of our lives? Why is work (on the job, that is) "the basis for our standard of living," as opposed to the household and informal economies? Why has the home been transformed into an adjunct of the imperial workplace, and the whole of life contaminated by the ideology of professionalism? Maybe it's time to take our lives back from work--or rather, from our jobs.

Employment is changing. It used to be a straight swap: so many hours for so much money. Punch in in the morning, punch out in the evening. Today’s more flexible work arrangements mean that you can’t necessarily know in advance how much you’ll be working.

Technology. It used to be that when you went home, you were off the clock. Cell phones, email, faxes etc. have made us reachable everywhere and further blurred the boundary between life and work. The net result has been that people work more and more hours - in fact the number of hours the average employee spends working is steadily rising....

Now, I’m not saying that these things are bad and we should turn back the clock to a previous era of predictable, boring work. I’m saying that this is new to us and we’re still figuring out how to navigate these new waters.

Well, I am saying they're bad. These changes aren't just a fact of nature; they're an aspect of Elizabeth Anderson called "contract feudalism," and a state of affairs imposed on us from above. And if today's work arrangements are "more flexible," the worker is the party who has to be flexible: so flexible, in fact, his boss can bend him over the desk any time he wants.

These structural issues are something I'll keep coming back to throughout this review.

Third, his emphasis on the variation in subjective attitudes--i.e., how individual perceptions differ as to what kinds of work are pleasant--probably goes too far. While it may be true, to an extent, that "one man's happiness is another's living hell" (p. 23), there are some fairly objective common denominators to most people's concept of a living hell. Understaffing, increased work loads, and stagnant pay are things most people consider bad. And these are all increasingly predominant in the American workplace these past thirty years because of--you guessed it--those structural forces I keep harping on.

WHERE KJERULF GETS IT RIGHT

You're probably wondering just how long this list of reservations can go on before I get to whatever good things I have to say about this book. Well, I can't stress enough that, despite all the caveats above, Kjerulf gets it.

There are many things that distinguish his genuine approach to worker morale and happiness from gimmicks like Fish! philosophy. For one thing, he expresses considerable scorn for attempts to bully workers into fake happiness ("the beatings will continue until morale improves") as a way just to get more work out of them, or otherwise manipulate them into better serving the agenda of management without any added expense:

If you purposely or inadvertently create a mood at work where it’s somehow right to be happy and wrong not to be, people will be less happy. You can even end up making happiness at work a dirty word—something people ridicule and actively resist. (pp. 26-27)

That's certainly the reaction I witnessed to Fish! Philosophy in the workplace. (By the way, a good response to the Smile Nazis, when they tell you how many muscles it takes to frown, is "How many muscles does it take to mind your own fucking business?")

Despite his emphasis on subjective attitude over objective conditions, Kjerulf repeatedly makes it clear that his dismissal of working conditions shouldn't be taken too literally or absolutely:

Even if the work itself is perfect, that is absolutely no guarantee you’ll be happy at work. If your manager is a terrible person, if the mood at the company is bad, if you’re bullied or treated unfairly, you will be unhappy at work, no matter how great the job. (pp. 35-36)

This impression is reinforced by the anecdote immediately preceding, which led into the statement above:

Chris is a travel journalist who gets to travel to all the best resorts and travel destinations in the world and try out the best restaurants and hotels. You have to admit that sounds like really nice work, and when I met him, my first thought was, naturally, “How can I kill this guy and get his job!” But the truth was, Chris wasn’t that excited about it, because he never really got to enjoy his travels. He had to eat dinner in 4 or 5 different restaurants in one night. He had to visit 3 or 4 different hotels a day and could never relax in any of them. He also had to travel a lot and the endless plane rides soon became a boring chore to him.

On the other hand, I talked to Peter, a sanitation worker once (a few years ago he would have been called a trash man) who absolutely loves his job. Peter has to get up at 4 in the morning, but that also means that he is finished by noon and has the rest of the day off. He enjoys working outdoors, he has a great time with his co-workers on the garbage truck, and he likes doing a great job and helping people out.

In other words, happiness is closely associated with a sense of being in control. On his blog, as well, Kjerulf correlates happiness with "democracy in the workplace." Companies that "dare to include employees in the decisions being made … also tend to be very happy workplaces." And they also tend to be very productive:

People who work in democratic organizations are more involved, take more responsibility, are more motivated, more productive and happier than employees of authoritarian companies. This also makes democratic organizations more successful.

Happiness, likewise, is associated with openness--in the sense both of 1) management honesty and transparency 2) freedom to engage in frank criticism of polices and conditions within the company. Along these lines, Kjerulf stresses the importance of speaking your mind when you're dissatisfied, as a form of taking control of your work situation. (pp. 56-57) Complaining constructively, where it will do the most good, is a step toward achieving happiness on the job. (p. 60)

Fish! is all about powerlessness, while Kjerulf never gets tired of stressing empowerment. Oh, sure, Fish! constantly harps on "choices." But the choices all involve how you "choose" to react to what's done to you, not exercising control over your environment. For Fish!, the only thing you have control over is your attitude toward being screwed. Consider these quotes from Fish! "teaching materials" helpfully provided to HR departments in various workplaces:

We can either give in to external events and pressures, few of which we can control, or we can take control of our own happiness. Our choices are, after all, the only things that no one can take from us in this world.

Many of us believe our attitudes are caused directly by outside influences like unpleasant experiences or negative people. While these things may act as triggers for our feelings, we can choose to either be subservient to these events, few of which we can control, or we can take charge of our own responses.

We can't control what happens to us, but we do have a choice about how we respond.

You can’t always control what happens, but you can control how you respond.

You can’t always control circumstances, but you can control your own thoughts. [emphasis added]

There you have it: fifty thousand hypnopaedic repetions, age five to seven--"we can't control what happens to us." You can't get any plainer than that, the message that Fish! tries to pound into our heads over, and over, and over again. We are uttlerly powerless. Our only choice is whether to spit or swallow. All those repetitions of "we" and "us" are intended to disguise a fundamentally assymetrical power relationship. Imagine management's reaction if the circumstances were reversed: if you and your coworkers matter-of-factly announced that, henceforth, you would be working less hard for a higher hourly wage. Imagine telling the boss "you can't do anything about these events, but you can choose to have a good attitude about them!" My guess is your boss would demonstrate, in short order, that he does have control over events, and that it's not his attitude that has to be adjusted. That's because, while you may be powerless, your bosses most certainly are not.

For Kjerulf, in contrast, if you achieve happiness despite your surrounding conditions, then you do so at least in part by standing up on your hind legs to change those conditions. Can you imagine anyone associated in any way with Fish! Philosophy saying anything like this?

Psychological studies show again and again that a fundamental basis for our happiness is the ability to control our own environment. When we are involved in the decisions that matter to us, when we can participate actively in creating our future, when we feel active rather than passive, we are much happier. Contrast this with a work environment where big decisions that directly affect you are made without your knowledge and without your input.

I freely admit that there is a problem here: While you can freely choose to be positive, to learn or to be open, it’s difficult to participate unless you’re invited to do so and your workplace and managers encourage it. This particular factor therefore relies more on your work environment than the other five. But this is no excuse. If you only participate when you’re actively invited to, you will miss many opportunities. Instead, you must sometimes invite yourself to participate. (pp. 64-65)

Control means controlling the actual circumstances under which you work, like your work schedule and how the work process is organized. (pp. 66-67)

A central theme of Fish!, if you didn't quite catch it earlier, is that we can't control the circumstances of our work or what's done to us. It's pushers never tire of repeating that theme, over and over again. If Kjerulf even remotely fell into the same category as manipulative management fads like Fish! and Who Moved My Cheese?, his discussions of the worker's resonsibilities for achieving happiness on the job wouldn't include the possible need to change working conditions:

It may mean unpleasant conflict, because not engaging in conflict would be even worse. It may mean battling existing corporate culture and values.

For us in the heart of neoliberal Babylon, "battling existing corporate culture and values" may be the moral equivalent of tearing down the Bastille one stone at a time and frog-marching Louis and Marie to the guillotine. Specifically, for many American workers, an all-out guerrilla war may be the most direct route to happiness and empowerment (more about this at the end).

Kjerulf repeatedly identifies happiness at work with the making of choices--not just the choice to be happy despite the generally shitty conditions, a la Fish!, but the choice to be happy by taking control of the conditions themselves:

The path to happiness at work starts with a simple decision: You must want to be happy. If you don’t commit to being happy at work, you won’t be. You won’t make the choices that make you happy. You won’t take the actions needed to get there. You won’t change the things that need to change.

On the other hand, if you say, “Yes, I choose to be happy at work and to do what it takes to get there,” then things will start to happen. Just making that decision won’t magically make you happy—but it must be the starting point.

And something interesting happens when you decide on happiness: You take charge. When you decide to become happy at work and to do the things necessary to get there, you’re in charge of your career and your work situation. You’re no longer dependent upon the whims of your manager, co-workers or workplace. (pp. 31-32)

Happiness and "choosing your attitude" are not things done instead of addressing working conditions, or even after addressing working conditions; they're achieved, in large part, by means of addressing working conditions. As Kjerulf put it elsewhere, part of achieving happiness on the job is refusing to put up with bad working conditions and bad bosses. Mental health therapy by fighting back, in other words. Sometimes the first step to achieving happiness is to say "I'm mad as hell and I'm not gonna take it any more!"

And it's inconceivable that the human garbage associated with Fish! would ever, under any circumstances, address the power equation and its effect on happiness in the workplace. Fish!, in fact, is a way to avoid dealing with the p-word, to provide the powerless with an opiate so that they don't endanger the existing locus of power. Kjerulf, on the other hand, firmly grasps the nettle. His treatment of the power issue is just another bit of evidence that he recognizes the existence of objective conditions that--even if their absence isn't sufficient cause for happiness--can at least cause unhappiness, beyond any simple individual choice of attitude.

The uncontested, number-one reason why people are unhappy at work is bad management. Nothing has more power to turn a good work situation bad than a bad boss.

The reason that having a bad manager is so bad for us is that managers have power over us. Managers can change our work situation, allocate us good or bad tasks, and, ultimately, fire us. This power imbalance is why a good relationship with your manager is so important. (p. 92)

Perhaps the most important form of power, when it comes to happiness on the job, is the perceived power to walk away.

Now, while Jakob likes his job, he doesn’t need it. He’s independently wealthy and so skilled he can always go out and get another job, and therefore has zero fear of being fired. While other people in the company feel they must watch their tongue for fear of the consequences, he feels free to say and do exactly what he thinks is right.

And here’s the thing: When Jakob stands up to this VP and tells him that he won’t stand for his unpleasant approach and explains exactly why his abrasive style creates problems for the company, he listens. Nobody has ever told any VP at the company these things before, and for the first time the company has an employee that is totally unafraid of doing so. The result: This particular VP is slowly changing his ways. And he certainly pulls none of his usual attacks on Jakob, who he knows simply won’t stand for it. (pp. 111-12)

Steve Forbes was in Denmark this week on a European tour, meeting with political and business leaders. His main message was that while Denmark has arguably the strongest economy in Europe right now, the high danish taxes are limiting our economic growth.

And danish taxes are very high: The highest tax bracket kicks in after only 40.000$ earned, and you pay 60% taxes on everything you earn over that. This money is used to finance a very high level of public services, including free health care, schools and universities for everybody.

The high tax level also finances what is called the danish flex-security model: In Denmark it’s relatively easy to fire employess (flexibility) but unemployed danes enjoy great benefits (security). Compare this to Sweden where it’s very, very difficult to lay employees off because the unions have enormous influence or to the US where unemployment benefits are not as generous.

Forbes argues that the economic success Denmark is currently enjoying comes in spite of the high tax levels, and said “just imagine what you could achieve with lower taxes.” His argument goes something like this:

1. Because taxes are so high, working more doesn’t pay much, therefore people work less2. If taxes were lower (say 40% in the top bracket instead of 60%) people would work more3. People would also make more money, meaning the state would take in the same amount of money in taxes4. People working harder would result in increased economic growth

I think he’s wrong, wrong, wrong, and I’ll tell you why!

It follows from Forbes’ argument that danish employees and businesses must be supernaturally talented, able to create great results even when they’re shackled by the world’s highest taxes. And that consequently lowering those taxes would turn Denmark into a true monster of economic growth.

While this view is certainly flattering, it’s probably more reasonable to assume, that danish businesses and employees are on par with those found in other countries, and that the economy is doing so well not in spite of but because of those high danish taxes.... Here’s my rebuttal to each step:

1: Because taxes are so high, working more doesn’t pay much, therefore people work less

When taxes are very high, working simply for the pay-check is a bad bet. But let me tell you, danes still work their butt off when they enjoy their jobs. People working long hours only for the money are not good to have around. People who love their jobs are much more productive.

2: If taxes were lower people would work more

It’s true, people would work more. But would they achieve more?....

Also, when people work too hard, they become less happy at work. Being less happy at work means that you’re less creative and more resistant to change. And if there’s one thing businesses need today it’s innovation and change-ability.

3: People would also make more money, meaning the state would take in the same amount of money in taxes

However, when people work more they also become more prone to stress, disease and depression, which increases public health expenses and costs businesses time and money.

4: People working harder would result in increased economic growth

When people work more, productivity plummets. You may have GDP growth in terms of people working more - but are they actually producing more?....

Conclusion: It’s about the happiness, stupid!

The danish model, rather than hindering economic growth is more likely to be the source of it, for one simple reason: It promotes happiness at work. Working only for the pay doesn’t pay and unemployment benefits are pretty good, so why should you stick with a job you don’t like. And let me say this again: People are very rarely productive in jobs they don’t like. This frees employees to find a different job they DO like - and no-one is more productive than an employee who truly loves her job.

This also combines with a long-standing danish tradition of focusing on happiness at work as well as a modern, egalitarian leadership style to make the danes the happiest people at work according to a recent study. And in my opinion, that is the most imporant factor.

And on a more fundamental level: Why is economic growth a goal in itself? Why should this one parameter be a nation’s most important success factor?...

[The] more people work (beyond a certain point), the less happy they are. Working more hours and earning more money makes people less happy - good health and spending time with friends and family makes people more happy.

This also consistently informs negotiations between unions and employees in Denmark. The consistent trend these last 10-15 years has been that employees have held out for more vacation time rather then raises.

Forbes’ plan would probably make more people work more. And they would make more money. They would also be less happy and more prone to stress, heart disease and depression. Which would cost society a lot of money.

Whereas people working sensible hours (as many Danes are today) tend to be happy, creative and innovative. Exactly the qualities a nation needs to succeed.

I still don't think Kjerulf goes far enough in addressing the structural forces making for reducing this power to walk away on a systemic level, but the extended quote above at least demonstrates that he recognizes, in principle, that structural factors are important. And it sure as hell isn't the kind of thing you'll find in the Fish! book.

Considering all the ways in which Kjerulf stresses the importance of working conditions, and of having control over one's work, the question arises: doesn't this conflict with all his statements, quoted earlier, to the effect that happiness is about choice or subjective attitude rather than objective conditions? I think, rather, that it puts those statements in context, and makes it clear that what he meant by them--as objectionable as they may seem at first glance--is far different from their superficial import.

The apparent contradiction can be resolved, I think, by understanding his distinction between the "prerequisites" of happiness on the job--i.e., the minimum conditions necessary for happiness to be possible, or the stuff management has to not do to screw things up--and the actual achievement of happiness as a positive condition. That theme is not fully and explicitly developed by Kjerulf himself--I'm not even sure whether he has fully developed the implications of it--but it's implicit. Consider, for example, this passage:

According to Maslow’s widely-known hierarchy of needs, our most fundamental needs are physiological—food, sleep, etc. —and our need for saftey. This is followed by our need to belong and to feel loved. Our species has evolved in groups and communities, and few of us can be happy unless we belong to a functioning group. (p. 75)

The need for self-actualization through work can be addressed only after the more fundamental needs have been met. If a workplace has been downsized and sped up until it's a living hell just trying to keep from falling further behind, you live in the face of job insecurity, you haven't received a pay raise in three years, and management is utterly unaccountable for shitting on you, the only way to get to the happiness stage is through the more fundamental ones. It's difficult to achieve happiness in most workplaces because employers have not met the basic prerequisites for happiness; they have not stopped doing the bad stuff that militates against achieving happiness. Most workplaces not only do not address, but are a direct affront to needs more fundamental than happiness. Employees are affronted, in fact, to the extent that simply being present in the workplace keeps their "fight or flight" response constantly engaged. Only when material and security considerations have been addressed (Can I pay my ever-increasing rent on a stagnant wage? Will I even be working here a year from now?) can happiness and self-actualization even be considered.

And these conditions on the job are not simply the result of random variations in personal temperament, because some companies are unlucky enough to have clueless pointy-haired bosses. Such working conditions increasingly predominate for those structural reasons I keep harping on. Thirty years or so ago, the owning classes in this country decided it was time to clamp down on labor, and used all the increases in productivity since then to throw themselves a big party. And since then, the workplace has become ever more understaffed, overworked, stressful and authoritarian.

In another place, Kjerulf describes a seemingly utopian workplace in Denmark with what most people would regard as ideal conditions: a relaxed work atmosphere, employee autonomy, palatial surroundings, flexible scheduling, and good pay. But some workers grumbled about red wine instead of white in the holiday gift basket.

Top management’s responsibility is to enable managers to create an atmosphere where it’s easy to be happy at work. But as the above story shows, no matter how well you do, you can’t force people to be happy—that is still their own responsibility.

The company has a responsibility to prioritize, value and reward happiness at work. It’s no use for a company to say, “We want people to be happy at work,” and then turn around and reward massive overwork, ruthlessness and a traditional authoritarian management style. (p. 151)

There is a hierarchy of responsibility here. As Kjerulf himself suggests, there is a certain minimal atmosphere, a minimal set of objective conditions, which are conducive to happiness on the job. Once this foundation is laid, one can talk about the employee's choice to be happy. If management policies that create an atmosphere conducive to happiness are not a sufficient condition for happiness, they are at least a minimal necessary condition.

Things may be different in Denmark, probably owing in part to structural conditions (As we've already seen, Kjerulf himself mentions on his blog how much greater the bargaining power of labor is in Denmark, owing to how much easier it is to walk away from the table, and consequently how much more motivated people are on the job). But in America, I don't believe the main obstacle to happiness at work for most people is internal or psychological, as in employees choosing to be offended at the presence of red wine in a gift basket. In our increasingly insecure, downsized, two-tier labor force, people are deprived of the basic structural conditions conducive to happiness on the job.

A good example is Helle, a Danish nurse who got together with three colleagues on the H4 ward in her hospital to change the atmosphere and

do something about making their ward happy. They talked to the head nurse and got her to give them a day off in which to cook up some ideas.

The ideas included a summer party for the staff, and an "Order of the Elephant":

They’d heard about Kjaer Group and their Order of the Elephant. The nurses copied this, and bought a small elephant plush toy that they could pin to their uniforms. Whenever a co-worker deserves praise, that person is awarded the elephant, and they write in a journal what that person did to earn it.

Now the first thing that struck me about their ideas was how much they resembled Fish!, at least on a superficial level. But Fish! is a manipulative gimmick, taken on the initiative of management, to jolly a powerless workforce into being happy despite it all; the superficial resemblance to Fish! matters far less than the power behind the latter. Given the state of labor relations in Denmark and the likely superior staffing conditions in Danish hospitals (correct me if I'm wrong on this, Alex), I'm guessing the measures taken by Helle and the other nurses were a symptom of already empowered workers taking action to promote their own happiness when the basic structural preconditions of happiness had already been met. The nurses I've seen in American hospitals, who commonly work hellish 12-hour shifts and then stay over an hour or two to catch up their paperwork, wouldn't have the time or energy to devote to such things as plush elephants. Here, it's management that fools around with that kind of thing, and we just have to humor them.

In a workplace where workers are already empowered and adequately staffed and working conditions meet the bare minimum standards for human tolerability, actions like those of Helle's group might simply be a spontaneous way of expressing happiness, or of taking advantage of that preexisting set of conditions. But American employers resort to virtually identical practices as a substitute for providing even minimally adequate working conditions, as a way of avoiding having to create conditions conducive to happiness.

In my experience most people want to be productive workers, and they want to create happiness for themselves. As Kjerulf says, creative labor is a basic human drive. That's why focusing on the kind of stuff Helle and her coworkers did, rather than on the structural conditions they started with, is getting things backward. If a workplace is adequately staffed and people are empowered to do their jobs well with all the resources they need, they will spontaneously find, on their own, ways to make work fun without any special management policies. I suspect that's what really happened in the specific case of Helle. If workers are empowered and given the basic material prerequisites of human dignity, the parties and plush elephants will take care of themselves. If workers are treated like shit, trying to jolly them into liking it with plush elephants will go over like sugar coating on a turd.

Many of us are trying almost desperately to hold on to the belief that bringing more toys into the workplace will make things more fun.

It seems to me, however, that bringing more toys into the workplace to make work more fun is like bringing more canaries into the mine to make the mine safer. If the environment is toxic, it’s time to get out of the mine.

Kjerulf adds that

if the environment is toxic, bringing in motivational speakers, inspirational posters or just about any other gimmick you can think of is useless. Or worse than useless, because it will be seen as an attempt to distract people from the real problems.

If we Americans could force our employers, by whatever kind of Jacquerie or John Ball's rebellion or Reign of Terror necessary, to provide the minimal necessary conditions conducive to happiness on the job, I don't think the rest of it would be a problem. The nursing staff I've seen, many of them with shattered nerves, many more with ruined feet, knees, or backs, would sing hosannas if all they had to complain about was red wine in their gift baskets.

I've personally witnessed the demeaning Fish! approach--forced socialization, stuffed animals, and all--introduced on a hospital ward where nurses commonly have six, seven, or eight patients apiece, and are forced to extend twelve-hour shifts because their burnt-out relief couldn't force themselves to come to work. This was a ward where patient families were forced to camp out in the rooms all day, hoping against hope that their harried nurse would finally have time to slow down and check on something in response to some basic question, where the meds or dressing changes were four hours late, and where (even if the relief nurse showed up for the next shift) the nurse was forced to stay over two or three hours past the end of her twelve-hours shift catching up on paperwork that she didn't have time to do earlier because of the nonstop interruptions. This was a ward where patients commonly complained that they shit the bed waiting 45 minutes for a bedpan, or that they didn't get a single bath in a five-day stay, because the orderlies had ten or twelve patients apiece. And on the bulletin board of that ward's break room, pursuant to management's strategic decision to adopt the Fish! Philosophy's program of "Arbeit Macht Frei" agitprop, was a quote from Martha Washington helpfully chosen by the ward supervisor: something about our happiness owing more to our choice of attitude than to objective conditions, or some other God damned filthy thing.

Make no mistake. Giving nurses stuffed animals in these conditions isn't just clueless. It's a grave, mortal insult. It's a phlegm-streaked wad of spittle in the upturned faces of someone who's just been kicked in the belly. Any management that creates working conditions like those I describe in the paragraph above is an enemy. And I don't want to be told by my enemy that I'm "as happy as I make up my mind to be." Even if it's true, he's the last person in the world who should be saying it. It's about as morally depraved as a death camp commandant telling the inmates that happiness is their responsibility.

Now, again, I don't know how things are in Denmark. But I wouldn't be surprised if this was a hospital ward where the nurses had four patients apiece, and where orderlies had five or six patients, as was the case in America before the last ten years of downsizing. Most likely these empowered nurses, who didn't already work in a living hell of understaffing and burnout and being treated like fucking human garbage, decided on their own to liven things up with parties and stuffed animals as an expression of their own individual human dignity, a way for people with good lives to make them even better. If so, good for them.

Kjerulf himself sometimes seems ambivalent as to whether he grasps the implications of the above-stated principle, about the necessity of providing minimal sufficient conditions conducive to happiness before it becomes a viable personal choice. For example, under the heading "It's NOT about money," he includes an anecdote about a pay raise at IKEA--a 25% raise for checkout staff--that "paid for itself in six months!" (pp. 84-86)

If a raise doesn’t make people happy at work, then why did it work for IKEA? For three reasons. First of all, the raise gave people a significant increase in their standard of living. The checkout staff were the least well paid in IKEA, so a 25% raise made a palpable difference to their quality of life.

Secondly, the raise gave people recognition. IKEA clearly stated that the reason the staff received the raise was because they are the most important group of employees. Although there are sales staff available inside IKEA’s stores, most customers help themselves, meaning that the only IKEA employee that customers are likely to talk to is sitting at the cash register. This made the checkout staff feel valued and trusted—and that made them happy.

And lastly, it’s about fairness. Psychological business studies show that people don’t judge their salary based on the absolute figure, but by comparing it to their colleagues, peers and the market average. The checkout staff were suddenly paid as well as other IKEA employees, and far above the market average.

In other words, it's not about money for those above a particular threshold--for those whose fundamental Maslowian material and security needs have been met. When he says "it's not about the money," Kjerulf seems to have in mind primarily salaried upper middle class people for whom more money is a matter of recognition and self-esteem--not the working poor for whom it's a matter of (for instance) whether your car keeps running, or whether you get to enjoy the shitty taste in your mouth that comes from bumming another ride.

But Kjerulf himself seems to understand that, while it may not be about the money, you still can't get to what it is about until you've first met the minimal need for money. If, as he said, "rewards don't work, what is the alternative?" The answer is to "pay people fairly and then do everything possible not to focus on rewards." (p. 88) That "then" is key.

And while it may not be about the amount of money, for those over a certain threshold, the perceived fairness or unfairness of an employer--as demonstrated, among other things, by comparative pay rates--is a big factor in happiness.

It matters less what your salary, your title, your bonus and your perks are. It matters much more whether you think they’re fair. And while fairness in itself is not enough to make us happy at work, unfairness can make us desperately unhappy. (p. 111)

So, for example, a corporation whose CEO makes 500 times as much as the average hourly worker might expect to have some pretty unhappy employees.

If Kjerulf seems on the edge of grasping the significance of material needs as a prerequisite for happiness, he has it firmly in hand when it comes to security needs. Job security, he says, is high on the list of things that make people happy at work. "It's obvious that spending each workday in fear of being fired will make you desperately unhappy." (p. 89)

He seems to recognize, likewise, that other material conditions, if not sufficient to cause happiness, can at least prevent it by their lack. Overwork, for example, ranks up there with bad bosses and job insecurity as a source of unhappy workplaces. (p. 95) Again, though, he doesn't seem to understand that it doesn't just result from a few bad apples. It results from systemic pressures. Overwork, for the person on the bottom tier, is an objective necessity, because management has pursued a deliberate strategy of downsizing the workforce until it's at the breaking point from the increased workload.

Perhaps the most interesting part of the book, from the standpoint of my own interest in libertarian org theory, is Chapter 7: Happiness is Good for Business. Kjerulf is quite correct that treating workers like human beings will result in increased productivity. It's a fair assumption that organizations with a fairer balance of compensation between senior management and production workers, and with more autonomy for labor in organizing its work, would be far more productive (Winfried Vogt's idea of the "liberal firm" is a good proxy for such an organization). Worker empowerment, reduced bureaucracy, intrinsic motivation, and the like, will have near-miraculous effects on the economic health of an enterprise. As Kjerulf points out, satisfied work forces have far lower costs from turnover and absenteeism, and demonstrate far greater enthusiasm in their work style, sales efforts, and the like. In addition, as my favorite radical economist Chris Dillow observes at Stumbling and Mumbling blog, cross-national studies find that high levels of income inequality between senior management and production workers tend to also have much higher ratios of management to production workers. For example, he cites Sam Bowles: "Supervisory labour input is strikingly lower in countries with more equal earnings distributions." At the most egalitarian end of the spectrum, the self-managed worker co-op averages only about a quarter the front-line supervisors of capitalist firms in the same industry. A great deal of the bloated management hierarchy in the American corporation is an authoritarian response to the agency problems resulting from production workers' reduced pay and autonomy.

I can also say from personal experience that adequate staffing levels and reasonable work loads probably reduce production costs, as counterintuitive as it may seem to the kind of MBA who swears by downsizings and speedups. Hospital studies have found that deliberate understaffing is extremely counterproductive as a cost-cutting measure. The apparent savings on labor costs are more than offset by increased costs from hospital-acquired infections, falls, and errors--not to mention lawsuits resulting from the same. Patients aren't stupid, either. They remember how likely they were to get a daily bath and how long it took to get a bedpan ten years ago, as opposed to today. And they compare their own direct experience of service with the smarmy rhetoric in those hospital commercials with the soft lighting and elevator music.

I can take the argument even further: although it's hard (for obvious reasons) to arrive at a very close estimate, I would guess that the costs of waste and sabotage alone, by disgruntled workers, are more than enough to offset any savings on labor costs. In one particular hospital, with one of the worst levels of understaffing and stress and the greatest perceived adversarial attitudes from management that I have ever seen, I have noticed that orderlies almost never swipe bar codes to charge supplies to patients; more often than not they throw dirty linens in the trash to save a trip to the dirty laundry bin. The justification is always the same: "This can come out of the money they're making by working us like dogs. They want to save themselves money by working us harder; we save ourselves trouble by costing them extra money--it's a pretty good trade."

As Kjerulf observed in regard to production workers at a manufacturing plant he mentioned on his blog,

Many of the people she met at the plant were dedicated, hard working, highly skilled and creative. But the way they worked offered them no opportunity to use those sides of themselves. They were locked in a tight battle between management and unions that actually had them cheering whenever mistakes caused production to stop, giving them an unexpected break. This is not what they’re naturally like - it’s a reaction instilled in them by an inhuman system.

If the company had listened to these people, it would have discovered that they’re innovative, skilled individuals that have many ideas to offer to make production more efficient. But as things are, they end up using all their considerable creativity to cut corners and cheat the system instead.

Exactly! Management--not just at the hypothetical hospital above, but everywhere--would be amazed at how fast red ink turned black if employees ever stopped hating them. Many of us workers, in our hatred for management, resemble the Pole who found a genie and wished three times for the Chinese army to invade Poland; when the astonished genie asked for an explanation, the Pole said it would be worth it because the Chinese would have to cross Russia six times.

Unfortunately, there are massive barriers to the application of Kjerulf's ideas, given that the average workplace is controlled by management. Kjerulf presents many case studies of their successful application. But I fear they are likely always to be in a minority, so long as existing structural forces remain unchallenged. The greatest likelihood is that the management of a workplace will pay lip-service to Kjerulf's gospel of treating workers like human beings, but transform it in practice into a false gospel, some kind of manipulative dreck like Fish!

This book is full of anecdotes about management that decided to put a priority on worker happiness, but it's hard to tell from reading Kjerulf's account of them just how genuine they are. Short of us doing our interviews with random employees of those same firms, it's hard to tell how much of what Kjerulf describes is a Potemkin village. A good example is his treatment of the Danish retail firm Irma. The chain had been losing business to the discount retailers, and was unable to regain market share by competing with their cheap merchandise.

In 1999 they went with a different solution, and in one last gamble made Alfred Josefsen CEO. The soft-spoken, 42-year-old Josefsen had a plan to fix Irma’s deep-set woes: “Put people first.” Sure, he would improve purchasing, distribution, cost-cutting and advertising, but Alfred believed that if Irma could make its people happy at work, everything else would follow.

Open communications—Alfred’s weekly newsletter to Irma’s people is not a press release or a corporate memo. It’s deeply personal and heartfelt, and has fostered trust and openness between employees and management.

Celebrating good results—Whenever Irma needs to celebrate, all employees are invited to a huge party. Part of this involves top exeutives getting on stage and singing the company hymn! (p. 134)

While these measures sound superficially Fish!like, to me anyway, Alfred may very well have really done something about the work atmosphere and made it a better place for employees. Then again, he may have just paid lip service to the principle and then resorted to gimmickry. The itemized measures above, for example, might either be gimmicks or real reforms; the devil is in the details. Unfortunately, they're details to which the reader has no independent access.

"Putting people first" is a slogan I've seen in just about every place I've ever worked, but never once seen actually put into practice. Most senior managers are very good at magical thinking: they think if they insert the right magic words into a mission statement, it has some miraculous effect on reality. So all you have to do is put smarmy phrases like "putting patients first!" or "treating employees as valued members of the healthcare team!" or "employer of choice!" into the mission (or vision or values) statement, and then sit back and wonder why those ingrates keep returning such abysmal results on the employee satisfaction survey "after all we've done for them." Take the example of a hospital (let's just pretend it's hypothetical) where several years of serial downsizings and hellish levels of understaffing resulted in ever-lower employee satisfaction scores. The management's response, after the first really horrible satisfaction survey: Fish! Philosophy--which died a quiet death in the face of employee contempt. After the next survey: a big interdepartmental committee, with a policy agenda called [Hospital Name] Experience, "to make [Hospital Name] an even better place to work!" (Golly gee, how? Even more work out of us and more money for them?) The committee's first order of business was to improve morale by--what? hiring more staff? No--writing new mission, vision, and values statements for management to pay lip-service to (Mercy me! I can feel my morale increasing already!). The lengthy digestion process in the bowels of this commitee also resulted, eventually, in a nifty system of reward stickers. When anyone "goes above and beyond" (a favorite catchphrase in the Magical Kingdom of HR), he or she is rewarded with a little sticker that can go toward a wonderful gift of some kind--just like green stamps! Of the two (hypothetical, remember) people I know who received stickers in the past couple of months, one of them saved a patient's life with the Heimlich maneuver, and the other gave up a day off for a 12-hour shift in hell. The cheapest item on the list of available gifts, a coffee mug, costs ten reward stickers. They didn't do anything about the staffing, of course--it's even worse. But goddamn! It's all worthwhile now because I know that someday, if I save enough lives, I can have a shitty coffee mug of my very own! I can't wait to see those improved (hypothetical) satisfaction survey scores this fall.

Big meetings to sing the company hymn sounds about as gimmicky as, say, tossing a stuffed fish around--or giving the Wal-Mart cheer. As for that newsletter, most MBA types can dictate a "deeply personal and heartfelt" message while holding a fifth of Wild Turkey in one hand and masturbating with the other. They learn that in business school.

As cynical as I may sound, and as many questions as I have about the genuineness of some of the management happiness programs Kjerulf witnessed, I must reiterate: Kjerulf is one of the good guys, on our side. Unlike all the ersatz happiness programs out there designed mainly for sale by the gross to HR departments so they can get employees' minds right, Kjerulf really cares about addressing the power equation in the workplace:

It's no use for a company to say, "We want people to be happy at work," and then turn around and reward massive overwork, ruthlessness, and a traditional authoritarian management style.

PRACTICAL IMPLICATIONS

I already mentioned Chapter Seven, on the bottom line effects of workplace happiness. Again, I strongly recommend it. A high degree of worker self-management and sutonomy in organizing their own work, along with management responsiveness in the way a firm is run, and perceived fairness in the distribution of work and rewards, together make for astonishing improvements in productivity.

Kjerulf is entirely correct--as we have already seen in the case of our assorted "hypothetical" hospitals--that you don't get good productivity or good customer service out of people who are treated like shit.

...it’s not just good for people. More and more businesses are finding that things go better with happiness and that happy companies have:

*Higher productivity—happy people achieve better results.

*Higher quality—because happy employees care about quality.

*Lower absenteeism—people actually want to go to work.

*Less stress and burnout—happy people are less prone to stress.

*The best people—people want to work for happy companies.

*Higher sales—happy people are the best salespeople.

*Higher customer satisfaction—happy employees are the best basis for good service.

*More creativity and innovation—happy people are more creative.

*More adaptability—happy people are much more adaptive and open to change.

*Better stock performance and higher profits—for all of the above reasons. Simply put: Happy companies are more efficient and make more money. [pp. 12-13]

Unfortunately, there are massive institutional barriers to any real and large-scale implementation of his happiness agenda. The main reason is that it must be implemented, on an institutional level, by managers.

While the kind of worker empowerment Kjerulf talks about would be good for shareholders, the interests of management don't necessarily or perfectly coincide with those of investors. There are a large number of alternative ways of organizing the business firm, all of which would increase shareholder equity and dividends to some extent. Out of all those possible forms of organization, the one that usually winds up being selected in the large corporation is chosen for its compatibility with management's perceived self-interest, rather than profit maximization. The predominant model of corporate organization produces less than optimal profits from the shareholder, while functioning near-optimally from a management standpoint in the opportunities it provides for management self-dealing, featherbedding, and bureaucratic empire-building.

This is not to say that the corporation is not ultimately responsible to the owning classes. But their ownership is conditioned by the nature of the medium through which they work. C. Wright Mills called this the corporate restructuring of the capitalist class. Not only are capitalists dependent on salaried managers from the New Class to administer the large corporation, but the corporate restructuring Mills referred to has led to a considerable amalgamation of senior management within the plutocracy. To a large extent, the portion of the plutocracy serving as corporate directors, or otherwise actively engaged in running the corporate economy, have absorbed the MBA culture.

I don't want to minimize the importance of the exploitation of labor by the owning classes--the stockholders and financiers. But in material terms, worker compensation and quality of work life are probably affected far more negatively by management's agenda than by the rents going to the privileged owning classes. It is quite likely that Vogt's "liberal firm" would produce both higher levels of worker satisfaction and pay, and higher levels of return to shareholders. In terms of its practical requirements, that would mean:

*Introducing self-managed teams on a genuine basis, rather than as a euphemism for "management by stress," with adequate staffing and reasonable workloads.

*Largely eliminating foremen and other bottom-tier management, replacing them with worker-elected managers on the shop floor, and radically streamling middle management and transforming its role into one of facilitators, coordinating relations between senior management and self-managed work teams.

*Eliminating the current plethora of middle management committees for "process improvement," "quality," and the like, and instead relying directly on input from workers on the most efficient way to transform the work process.

*Reducing both the absolute numbers and percentage of total compensation for supervisory personnel, reducing them to their 1970s levels (when management salaries were around 25% of total compensation, as opposed to today's 40%) and below, and to their present levels in European and Japanese firms (where management is about half as large a percentage of the total work force) and below.

*Reducing the differential between CEOs and hourly workers from the present 500 or so, not only to the 40 prevailing thirty years ago, but down to five or ten.

*Probably at least a 50% increase in the median worker's pay, coupled with generous profit-sharing and ESOP policies tying the worker's income directly to his role in the success of the enterprise.

*It would mean, in short, utterly decimating the ranks of management, transferring the entire cost savings to increased compensation for self-managed production teams, and rewarding the empowered workers when they find ways to improve the efficiency of production.

These policies would not only radically reduce agency problems and improve worker productivity. They would have additional beneficial side-effects. Increased worker involvement in organizing the work-process would largely eliminate the ill-advised portion of current capital investments that are made to promote bureaucratic empire-building, or are otherwise made in an atmosphere of calculational chaos because they are the "industry trend," without regard to their actual effect on productivity. The reduced agency problems would likewise curtail the tendency to substitute capital for labor far beyond levels of ideal efficiency, merely as a way of overcoming the agency problems of labor.

Unfortunately, barring radical changes to the structural environment within which corporate management operates--including radically increased bargaining power for labor--none of this is likely to happen. Management may well pay lip-service to it, or use such rhetoric as a Potemkin village front for the kind of management-by-stress that Tom Peters' decentralist fads translated into in practice. But that's all.

I have great news for you: Happiness at work is coming to almost all workplaces. It is inevitable. There is a massive tendency in the business world to focus more and more on making work a positive experience, and while it is not yet felt in every country or in every workplace, it soon will be.

The reason is simple but powerful: Today, customer service, efficiency and innovation are an organization’s prime success factors. It doesn’t matter how efficient a company is at producing yesterday’s goods if it doesn’t have the creativity to invent tomorrow’s. Nobody cares how efficient its business processes are if it can’t give its customers a good experience.

Studies consistently show that happy companies are way more productive, creative and service-oriented than unhappy ones. Therefore, the happy companies will beat the pants off the unhappy ones in the market place. The future of business is happy! It’s inevitable.

That would be a logical expectation if employment relations, and other aspects of life in corporate America, were governed by the free market. Unfortunately, they're not; there are built-in limits to how much a business will suffer competitively from treating workers like shit. As I have argued repeatedly in the past, when an industry is cartelized between a handful of firms that share exactly the same management culture and the same internal pathologies--and when competition is considerably limited, as well, by government policy externalizing costs on the taxpayer or restricting market entry--then it's pretty safe to be just as bad as everybody else. On the other hand, compared to a firm collecting the safe profits from its market share, running things the conventional way, attempting to be really good is usually more risk than it's worth.

Perhaps the best-known example of a firm that treats its workers well is Costco, with wages 40% above the industry norm and a CEO making $300,000--only about ten times the wage of the average Costco worker. The drastically reduced rates of turnover and theft have gotten Costco a modest improvement in stock price of 10% (roughly keeping up with the Dow Jones), compared to Wal-Mart's 5% slide. Along with this modest success has come near universal censure on Wall Street and in the business press for flouting the conventional MBA rules. The rewards for such a successful experiment are modest, at best, in the current cartelized environment, compared to staying with the pack. The Costcos are few and far between, as those sticking to the old formula manage to coast along with few negative consequences for their inefficient ways.

It is conceivable that ideas like Kjerulf's will become predominant and be applied for real in most workplaces, rather than a collection of atypical glowing success stories by marginal firms. But if so, it won't be because competitive pressure forces it on businesses under the present system. It will happen only after fundamental structural changes--which leads me to my concluding libertarian prescription.

Since Kjerulf's happiness on the job agenda is unlikely to make any general headway without prior structural changes to the system of power within which the firm operates, we must focus on attacking the system of power. First, at the macro level, we must remove barriers to competition between businesses, and remove forms of privilege that reduce the bargaining power of labor, so that employers will have to treat people like humans to keep staff and avoid being driven out of business.

The second prong of this attack is internal, and is suggested by Kjerulf's own identification of workplace happiness with taking control. As it is, the production worker is ungovernable without his own consent. As I have written elsewhere, the agency problems entailed in the nature of the labor relation as an incomplete contract are insurmountable. The potential weapons in the worker's hands to improve his work situation, once he decides to take charge, are revolutionary. Because the labor contract is an incomplete one, as Oliver Williamson said, "bargaining is pervasive" in the employment relation. Just as levels of compensation and reasons for dismissal are largely at the employer's discretion, levels of effort are likewise largely at the worker's discretion. The labor relation is a contested one, and its specific terms--how hard we work in return for what level of compensation--are made up by the interactions of both sides as we go along. There is no conceivable ex ante "general clause" that can remove the worker's discretion to slow down his pace of work, or distinguish the enlistment of customer sympathy through "open-mouth sabotage" and the "good work strike" from the normal duties of customer advocacy and exemplary service. As the old Wobbly saying goes, all we have to do is fold our arms, and the world will come to a stop. The only thing standing in our way is not the boss above, but the little boss inside our heads. It's time to kill him off. As it stands, the fact of the matter is that we're not playing on the same side as the boss, and have no common interest with him. If we're part of a "team," then management is the other side. The little boss in our heads still prevents many from seeing this. When we kill him off and act on this knowledge, management will quickly feel the need to give us reason to see ourselves as on their side again. The Wagner Act came about seventy years ago because the bosses needed it; in an era of labor struggle based on wildcat strikes and direct action on the job, the bosses were begging for a regime based on the union bureaucrats enforcing contracts against their own rank and file. It's within our power to make them, once again, the parties suing for peace.

In the meantime, I strongly recommend you buy this book. The principles in it are the kinds of things that would (and someday I hope will) make or break a business, in a truly free economy. The fact that Corporate America can rake in so much money by treating its workers like human garbage is not a reflection on the validity of Kjerulf's ideas, but an indictment of a system that doesn't punish such organizational pathology. Like the literature on worker cooperatives and self-management, Kjerulf's book is a great source of ideas for the seeds of what is likely to be the dominant form of business organization in a free economy, if we ever manage to tear down the walls.

Friday, July 20, 2007

Exchange with Preston Glidden on Planned Obsolescence

I had an interesting exchange of emails with Preston Glidden recently. In response to this comment from me...

...with the full development of a market based on decentralized production and cooperative ownership, such as Emilia-Romagna only hints at, it's quite plausible to imagine most or even all of the functions of a factory being farmed out to small home or neighborhoods shops. After Peak Oil hits, one of the first steps toward such an economy might be the machining of replacement parts for appliances in home "hobby" shops. In time, the custom machining of parts for appliances of entirely new design, distributed among networks of such small shops, might become the basis for a new economy.

He wrote:

I suspect that new designs would be needed before this kind of distributed manufacturing really took off, since so many things are designed to be built by specialized automated machines, and are not designed to be serviced in the field.

What I expect are "throwback designs", at least at first. Consider televisions. In the early days of televisions, the sets were made for easy field servicing. Most of the time, all you had to do was look for a dark vacuum tube, and replace it. Drug stores had tube testers that you could use to test the tube yourself. A nearby cabinet had replacements. I don't expect the return to a vacuum tube, but that kind of modular design could be re-created for easy servicing. It would have the added benefit of being more environmentally friendly, because we could stop throwing away the whole gadget when one component goes bad.

The TV could be built for upgrades, as well. The currently scheduled transition of standard to digital TV is probably too much for a simple upgrade, but if some super-cool p2p digital broadcast idea came out , it could be integrated into a modular FM radio with a simple plug in card.

Also, if you've ever seen the inside of a modern television, or most any electronic gadget, you'd see that the parts are machine soldered onto the surface of the circuit board. Such parts are very difficult to solder by hand, but the older design of through-hole soldering was made for hand-soldering. So I'd expect a throwback there. Most kit ham radios that are still sold today use through-hole tech.

Of course, as I commented to Preston, this tied in pretty closely with my earlier discussion with Eric Husman of Grim Reader blog on planned obsolescence:

The combination of patents on replacement parts and the deliberate abandonment of modular design by oligopoly manufacturers is probably in part a deliberate strategy of making repair artificially expensive compared to replacement. When the plumber says a washing machine or water heater would cost more to fix than it would be worth, I imagine he's telling the truth. But it's that way for a reason. The replacement part itself is probably patented, and marked up several hundred %. And the overall design is probably aimed at making the simple replacement of a single part as difficult as possible.

In regard to the specific example of TV and radio, my immediate reaction was that anyone independently producing such a digital upgrade module would probably run afoul of DRM or broadcast flag legislation, or some such cartelizing device. Such legislation has served pretty effectively to bar market entry and limit competition in DVD product features to the rate at which a handful of manufacturers want to spoon them out. Preston responded:

I'm not sure of the legal requirements. But there are no technical limitations. The input stage of an audio amp is basically the same everywhere. It does not matter what feeds it, whether AM/FM receiver, satellite, or p2p. All it would need is a common control mechanism, probably software programmable. Digital control buses are easy to design. You might not even need a new module, just a software upgrade. In the ham radio field, check out software defined radio for ideas.

Wednesday, July 04, 2007

Organization Theory Project--Chapter Outline

I've recently reworked the main post/page on the Org Theory project to feature a chapter outline of material published online so far. It can still be found at the same link on the sidebar. I'm also reposting it here.